A widow was last week given the rare pleasure of seeing the Social Security Department being made to refund her the tax she had to pay because the department had paid her pension arrears four years late and all in one year.

Maria Caruana Demajo sued the Director of Social Security saying that after January 1996 and a change in the law, the department, which previously used to pay her a pension based on the average contribution, now needed to collect information regarding the job held by her late husband, and the salary he had. No fewer than 9,000 widows or widowers had to be examined thus, and records pertaining to 27,000 people had to be examined one by one.

By May 2000, the database was completed and on 15 April 2000 Mrs Caruana Demajo received a cheque in respect of pension arrears from January 1996 to May 2000.

But the Income Tax Department assessed the widow on the whole sum as if it had been received during one year only. She was therefore taxed at the highest rate and also had to pay interest due.

Mrs Caruana Demajo complained to the Ombudsman, who accepted her complaint and ordered the Income Tax Department to refund her the income tax she had paid, but the department ignored the Ombudsman’s ruling.

In its judgement, the Court, presided over by Magistrate Michael Mallia, concluded there had been mismanagement by the Social Security Department. Adrian Attard, Principal Officer in the department, testified that work on the backlog in respect of the pension arrears was carried out after office hours, by people on overtime, working on a voluntary basis and with breaks for August and for Christmas.

The Court said this was not good management. If the government wanted to introduce a system to benefit pensioners, it also had to provide the necessary manpower to complete the exercise. It is not right for citizens to suffer as a result of the government’s delays.

The Court thus ordered the department to pay Mrs Caruana Demajo the sum of e3,559.28 in respect of tax incurred and interest accruing.